Syngene International Ltd Q1 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kunal Dhamesha - Macquarie Group Ltd - Analyst : Congratulations on a good set of numbers. First question on the guidance bit, while you have reiterated the guidance, but the way I look at it is Q1 top line growth is well above the full year number. And I know that could be quarter-on-quarter volatility, right? But then again, I know we are much above that mid-single-digit kind of guidance in Q1 and the trend seems to be positive based on the conversion of the projects that we are seeing, et cetera. So what is keeping you from revising that guidance on the upward side at this moment?

Question: Kunal Dhamesha - Macquarie Group Ltd - Analyst : What would be the impact of, let's say, the inventory adjustment in this quarter? Or if there is an impact this quarter or is it the future quarters?

Question: Kunal Dhamesha - Macquarie Group Ltd - Analyst : Sure. And then, just continuing on the outlook bit. I think if I remember it correctly, we had guided for the material cost to be around 26% to 27% of the revenue. And now we are suggesting around 26% for the full year. Is that correct understanding?

Question: Kunal Dhamesha - Macquarie Group Ltd - Analyst : Sure. Sure. And one more if I can squeeze in.

Question: Kunal Dhamesha - Macquarie Group Ltd - Analyst : Can you hear me now?

Question: Kunal Dhamesha - Macquarie Group Ltd - Analyst : Sure. So one on the Unit 3 since it has been now commissioned, I know we had suggested that we expect these plants to become three to five -- ramp up fully by three to five years. But how are you see seeing given that we have taken a GMP clinical batch and more RFPs getting converted.

Question: Shyam Srinivasan - Goldman Sachs Group Inc - Analyst : Just the first one on the quarterly disclosure, you have started sharing on CRO versus CDMO split. I appreciate that. I think earlier we used to do full year. So we only have like 61%, if I remember right, for fiscal '25. So if you could tell us the 67% equal in number last year and also, I think in your readout, you have called out CRO is growing faster. So I just want to understand some of the drivers of that. So that's my first question. So what's the equivalent to 1Q number last year, CRO as a percentage of total revenue.

Question: Shyam Srinivasan - Goldman Sachs Group Inc - Analyst : Okay. Sorry, sorry, Deepak, it's not helping me. But I'm just saying is it closer to -- I'm not trying to drive a quantitative number out, but has there been a dramatic mix change between this year and last year? I think that's what I'm trying to see.

Question: Shyam Srinivasan - Goldman Sachs Group Inc - Analyst : Got it. Helpful. Sorry, I'll persist on a different form of splitting the revenue now, small and large. I don't know whether you're doing it annual or quarterly but maybe even qualitative color on how those businesses have done. I think, I remember it was 24% or 25% for large molecule full year last year and I think small was 12%. So just any additional qualitative color on those two parts of the business as well. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 6:45AM, SYNN.NS - Q1 2026 Syngene International Ltd Earnings Call

Question: Madhav Marda - Fidelity International - Analyst : Firstly, if you could give some qualitative color in terms of how the pipeline is building up for the Mangalore small molecule plant? You did mention that pipeline development work is happening here, but some more color in terms of maybe how many projects you have on board and sales-wise, if you could give some color in terms of how many projects are in which phase. That would be useful for us to just understand. We know you've given a three- to five-year guidance for ramp-up of some of these units, but just some progress update would be very helpful.

Question: Madhav Marda - Fidelity International - Analyst : Yes. No, no, that makes sense. Are there any -- some of your peers have spoken about especially in small molecules, the ability to win some late-phase projects maybe in Phase II, Phase III directly, given there's some tailwind from China Plus One, et cetera, which is playing out. Are we seeing any such opportunities as well where you could get some more late-phase projects directly in the pipeline? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 6:45AM, SYNN.NS - Q1 2026 Syngene International Ltd Earnings Call

Question: Surya Narayan Patra - PhillipCapital (India) Pvt Ltd - Analyst : My first question is on the biologic service offering that we are giving. Sir, if you can give me some sense that, okay, apart from the Zoetis, what is the progress that we have been seeing, let's say, for other biologic service platforms, let's say, like biosimilar ADC peptides, oligonucleotides. All put together, what is the kind of progress that we are seeing there?

Question: Surya Narayan Patra - PhillipCapital (India) Pvt Ltd - Analyst : Okay. Just my broader point also that I was trying to drive out of this question was that what would be the current mix of Research Services business within biologics and manufacturing? Since we are now adding multiple capacities within India, outside India. So how the mix is likely to see given the kind of fastest growth visibility that is there for the overall biologic business opportunity?

Question: Surya Narayan Patra - PhillipCapital (India) Pvt Ltd - Analyst : Sir. My second broader question, sir, about the --

Question: Surya Narayan Patra - PhillipCapital (India) Pvt Ltd - Analyst : Is it fine now, ma'am?

Question: Surya Narayan Patra - PhillipCapital (India) Pvt Ltd - Analyst : Yes. My second question was about the major changes the trend that we are witnessing now influenced by Trump that there are many $50 billion of kind of investment commitment by large innovators into US that we are witnessing. So already like five -- four, five-odd players have committed that kind of investment into US. So given that, what is the kind of change in the pharma outsourcing environment that you are seeing? And how would we be positioned given that the major changes that has been happening in the space?

Question: Surya Narayan Patra - PhillipCapital (India) Pvt Ltd - Analyst : Okay. Sure, sir. Just with your permission, I will ask one last question, and that's a clarification also. About the small molecule capacity addition, particularly targeting the animal health that what you have mentioned in the annual report. So here, I just wanted to have some sense that, okay, by this capacity expansion, what target and that we are trying to drive the business from? That is one. And secondly, you have just mentioned that the small molecule capacity in Mangalore since it is a kind of end-to-end integrated in the sense that it is manufactured in the starting material, the intermediate as well as the kind of potentially the final product. So what utilization it could be there currently?

Question: Surya Narayan Patra - PhillipCapital (India) Pvt Ltd - Analyst : No, no. I was mentioning about the capacity addition on the small molecule side targeting animal health.